In a monopolistically competitive market, entry into the industry
A. is relatively easy.
B. is blocked.
C. is as difficult as entry into a monopoly.
D. is difficult due to extensive government regulation.
Answer: A
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A monopolist will
a. never produce at an output level where marginal cost is positive b. always produce at an output level where marginal revenue is positive c. seek network externalities whenever switching costs are high d. always produce where marginal revenue exceeds price e. never produce where marginal revenue exceeds marginal cost
A sole proprietorship produces only one good
Indicate whether the statement is true or false
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the short run would be:
A. P3 and Y1. B. P2 and Y1. C. P2 and Y3. D. P1 and Y2.
Assume that when the price of cantaloupes is $2.50 the demand for cantaloupes is unit-elastic, and that the demand curve for cantaloupes is linear and downward sloping. If firms lower the price of cantaloupes to $2.00 which of the following statements
can be made regarding the price elasticity of demand for cantaloupes? A) The demand for cantaloupes at $2.00 must be inelastic. B) We cannot determine whether the demand for cantaloupes is elastic or inelastic without knowing what the quantity demanded is at each price. C) The demand for cantaloupes at $2.00 must be elastic. D) The demand for cantaloupes at $2.00 must be unit elastic.